Chinese Power Consumption Crashes: Lowest Growth In 16 Months, Tumbles 10% In Shanghai, As Much As 22% Elsewhere

When it comes to Chinese (or any other in these centrally-planned, fabricated days) economic data, there is GDP and then there is reality. And as the current premier of China himself has admitted, there is no more accurate indicator of real, not bullshit "growth", than China's monthly power consumption. It is here that another rather massive divergence from China's official data (which has the world believe China GDP rose 7.5% in Q2) has appeared.

According to Economic Information Daily, power consumption in Shanghai and Jiangsu fell by more than 10% y/y in July, compared with double-digit growth a year ago, sources said. And it gets worse: other provinces, including Zhejiang, Anhui, Hubei, Hunan and Guizhou, reported a power consumption declines of up to 22 percentage points. One could almost say the Ukraine ministry of YouTube clips has been put in charge of China's GDP calculation.

As Market News adds, the National Energy Administration said power consumption rose 3.0% y/y in July, down from June's +5.9%, marking the lowest level of growth in 16 months.

Ouyang Changyu, a senior official with the China Electricity Council, said this indicates a weak industrial performance. Just in case it wasn't clear of course. He forecast power consumption to rise 3% to 4% in the third quarter, versus +5.3% in the first half, and that the government will step up policy support for economy in the second half of the year.

Which simply means that as we reported, the only reason for the recent surge in the Shanghai Composite in July was not bets on some renewed economic growth, which clearly does not exist, but because the PBOC joined its western central-planning peers in directly injecting outside money, read QE, in banks which is then used to levitate stocks higher, a la the S&P, in attempts to boost consumer confidence and "trickle down" the wealth of the 1%... which as the US has shown for the past 6 years, has failed miserably as the one and only backup strategy the central banks have left, after which only Bernanke's infamous monetary paradrop remains.

Take a look at KNDI's "speculative blow off." Imagine paying for a access to a car for less than your cell phone bill.

China is also the world's largest producer of coal (over a billion metric tons a year) and those prices have collapsed...mines are closing, joblessness is on the rise...welcome to the downside of "uber growth."

Having lived over there...no they're not "locusts." (See below.) Like Americans the ones I met were just out looking to improve their lot in life...and indeed were (we're?) doing just that.

Remains to be seen if their slowdown hits the USA's still total lack of recovery.

Don't worry. They will make it up in Fruit and Vegetable sales to Russia. Until the Russians start dying off from the toxic food. They can't provide clean water for folks to drink. What do you thing the tomatoes, garlic, potatoes and carrots get to drink. The good stuff?

How are you guys reading the chart? It is the growth of power consumption down not the total consumption down. It is impossible for power consumption to drop 20% there. As I know of, the power is still tight. People are encouraged to save electricity, unlike the West.

What can I say? I wish people read before they react. There are too much media spin.

Last year when I went for a business trip there, I saw many houses with solar panels and solar heaters installed, so more and more people are trying to produce electricity or hot water themselves. It might also cause official power consumption to go down ( or rise less sharply).

I just chatted with friends who returned from Chiina and they commented that July was MUCH cooler than usual..........that would contribute part of the drop.......and maybe snow in the early. Fall forecast.........

Private household electricity consumption is up 5.1% yoy. Snow in half of the mentioned areas is a rarity. Since the Party had decreed ages ago that there is no winter south of Yangtze river, there is no central heating south of the Yangtze, so people use their aircons for heating. That in combination with shoddy insulation of apartments drives power consumption south of the Yantgze through the (poorly insulated) roof in winter.

Power consumption data is consistent with two other indicators. Rich and privileged transfer their wealth in panic to overseas and institutions start selling financial instruments worth of 2.3T to natives. The rice dinner is served.

They have done so for many, many years. A bit of a spike is caused by the anti-corruption campaign, the first and only honest attempt to reduce corruption in China in the past 400 years. Investor naivity is an issue in China, no doubt. But the quality of financial products is getting better, as everyone begins to recognize the underlying risks.

Summer was MUCH cooler than last year. people are walking outside at night and not hiding behind their air conditioning. In my factory, we had NO electricity cuts this year. The temperatures did play a factor but a slow down in the economy is surely also a factor.

The debate continues as to how stable china really is but this is a sign that China is weakenung. Much of the recent growth in China after 2008 came from a massive 6.6 trillion dollar stimulus program that expanded credit and poured massive amounts of money into the system. This money encouraged expansion and construction with little regard as to real demand or need.

Like a plane on autopilot China continued in the direction it had been on and now China finds itself in a credit trap. For years the people of China have had the habit of saving much of what they earn but the low interest rates paid at banks has not rewarded savers. With few investment options much of this money has drifted towards housing and driven housing prices sky high. The economic efficiency of credit is beginning to collapse in China and the unwinding of China’s giant credit spree could be very painful. More in the article below.

Guys, whoever your "sources" may be, they have taken you for a ride. The Economic Daily did not carry any write-up of a drop in power-consumption in east China (a region good for 1/3 of Chinese GDP), nor did anybody else. You should verify news of such enormity, else your repute goes straight down the toilet. Power consumption in July in the mentioned areas was up between 5% to 6.2%.

If you look for any double digit drop of power consumption in China, you will find in the increase of power consumption per unit of GDP growth over the years. That one has dropped 2% to 4% every year for quite a while, statistically.

The reason for China stock exchanges lifting is purely, that they are viewed as undervalued by some benighted fund managers, who consider regular, functional stock markets maxed out.

Considering the ongoing rape of shareholders, the Chinese stock markets could not possibly be valued low enough, IMHO.